{"entity":{"id":"inflation-reduction-act","kind":"term","name":"Inflation Reduction Act 2022: Medicare drug price negotiation","aka":["Inflation Reduction Act","IRA drug negotiation","Medicare Drug Price Negotiation Program","Medicare negotiation","maximum fair price","orphan exclusion","ORPHAN Cures Act","pill penalty","Part D out-of-pocket cap","inflation rebates"],"tldr":"The 2022 US law that for the first time lets Medicare negotiate prices for top-selling drugs, capped what older patients pay for prescriptions at 2,000 dollars a year, and exempted drugs approved only for rare diseases, an exemption widened in 2025.","summary":"United States, federal statute. The Inflation Reduction Act was signed on 16 August 2022 (Public Law 117-169). Its prescription drug title created the Medicare Drug Price Negotiation Program (Social Security Act sections 1191 to 1198), inflation rebates, and a redesign of Part D. Primary text: the Congress.gov record of H.R.5376; the Centers for Medicare and Medicaid Services publish the programme pages and negotiated prices.\n\nWhat it changed: Medicare selects high-spending drugs that have been on the market without generic or biosimilar competition for at least seven years (small molecules) or eleven years (biologics) and negotiates a 'maximum fair price' that takes effect two years later. The first ten drugs, including the BTK inhibitor ibrutinib, had negotiated prices from 1 January 2026; the second list of fifteen, with prices from 2027, included the cancer drugs palbociclib, enzalutamide, pomalidomide and acalabrutinib. Part D out-of-pocket spending was capped at 2,000 dollars a year from 2025, which for patients on oral cancer drugs replaced bills of ten thousand dollars or more. Drugs with a single orphan designation and no other approved use were excluded; the One Big Beautiful Bill Act of July 2025 (Public Law 119-21) broadened that exclusion to drugs with multiple orphan-only indications and restarted the clock at the first non-orphan approval.\n\nThe arguments: manufacturers sued (unsuccessfully so far) and warned of fewer small-molecule cancer drugs, the 'pill penalty' of nine versus thirteen years; supporters point to the caps and the first negotiated savings. Oncology is disproportionately affected because cancer drugs dominate the highest-spending lists, and the orphan exclusion shapes which indications companies pursue first.","asOf":"2026-09-17","wikipedia":"https://en.wikipedia.org/wiki/Inflation_Reduction_Act","links":[{"label":"Wikipedia","url":"https://en.wikipedia.org/wiki/Inflation_Reduction_Act"},{"label":"Congress.gov: H.R.5376, Inflation Reduction Act of 2022 (Public Law 117-169)","url":"https://www.congress.gov/bill/117th-congress/house-bill/5376"},{"label":"CMS: Medicare Drug Price Negotiation Program","url":"https://www.cms.gov/initiatives/medicare-prescription-drug-affordability/overview/medicare-drug-price-negotiation-program"}],"tags":["law","us"],"related":["hta","drug-price-transparency","financial-toxicity","orphan-drug-act","us-regulatory-exclusivity","hatch-waxman","bpcia","340b-program","medicare-ced","amnog","eu-hta-regulation"],"cancers":[],"sections":[],"technologies":[],"targets":[],"drugs":["ibrutinib","enzalutamide"],"companies":[],"institutions":[],"pathways":[],"terms":[],"trials":[],"people":[],"bottlenecks":["b-drug-pricing","b-incentive-misalignment"],"keyPapers":[],"journals":[],"dependsOn":[],"notes":[],"category":"Regulation & policy"},"route":"/terms/inflation-reduction-act/","neighbours":{"term":[{"id":"340b-program","kind":"term","name":"340B Drug Pricing Program","route":"/terms/340b-program/"},{"id":"amnog","kind":"term","name":"AMNOG (Germany, 2011)","route":"/terms/amnog/"},{"id":"bpcia","kind":"term","name":"Biologics Price Competition and Innovation Act 2010","route":"/terms/bpcia/"},{"id":"biosimilar","kind":"term","name":"Biosimilar","route":"/terms/biosimilar/"},{"id":"china-vbp-nrdl","kind":"term","name":"China National Reimbursement Drug List negotiation and volume-based procurement","route":"/terms/china-vbp-nrdl/"},{"id":"eu-hta-regulation","kind":"term","name":"EU HTA Regulation (EU) 2021/2282: joint clinical assessments","route":"/terms/eu-hta-regulation/"},{"id":"financial-toxicity","kind":"term","name":"Financial toxicity","route":"/terms/financial-toxicity/"},{"id":"hatch-waxman","kind":"term","name":"Hatch-Waxman Act 1984","route":"/terms/hatch-waxman/"},{"id":"hta","kind":"term","name":"Health technology assessment (HTA), reimbursement and QALYs","route":"/terms/hta/"},{"id":"medicare-ced","kind":"term","name":"Medicare coverage with evidence development","route":"/terms/medicare-ced/"},{"id":"drug-price-transparency","kind":"term","name":"Oncology drug pricing and price transparency","route":"/terms/drug-price-transparency/"},{"id":"orphan-drug-act","kind":"term","name":"Orphan Drug Act 1983","route":"/terms/orphan-drug-act/"},{"id":"orphan-designation","kind":"term","name":"Orphan drug designation","route":"/terms/orphan-designation/"},{"id":"us-regulatory-exclusivity","kind":"term","name":"US regulatory exclusivity periods","route":"/terms/us-regulatory-exclusivity/"}],"drug":[{"id":"enzalutamide","kind":"drug","name":"Enzalutamide","route":"/drugs/enzalutamide/"},{"id":"ibrutinib","kind":"drug","name":"Ibrutinib","route":"/drugs/ibrutinib/"}],"bottleneck":[{"id":"b-incentive-misalignment","kind":"bottleneck","name":"Incentives reward me-too drugs and marginal gains","route":"/bottlenecks/b-incentive-misalignment/"},{"id":"b-drug-pricing","kind":"bottleneck","name":"Prices and value","route":"/bottlenecks/b-drug-pricing/"}]}}